Spousal contributions – a win-win.
When raising a family or reaching retirement, either you or your spouse may likely choose to take time off or cut down on work. But, you may be able to help your partner by contributing to their super whilst being eligible for a tax offset!
When raising a family or reaching retirement it is likely that either you or your spouse may choose to take time off or cut down on work. This however means that their super can fall behind.
The good news is if you’d like to help your partner by contributing to their super, not only will you help grow your combined retirement funds, you may be eligible for a tax offset! Are you eligible?
The spousal contributions tax offset eligibility criteria;
- You must be married or in a de facto relationship (including same sex partnerships).
- You must both be Australian residents.
- You must make a contribution using after-tax dollars, which you haven’t claimed as a tax deduction to your spouse’s super.
- The receiving spouse has to be under 65 years of age, or if they’re between 65 and 69 they must meet work test requirements, meaning they were gainfully employed during the financial year for at least 40 hours over a period of 30 consecutive days.
- The receiving spouse’s income must be $37,000 or less for you to qualify for the full tax offset and less than $40,000 for you to receive a partial tax offset.
What does that mean for me?
- Claim an 18% tax offset on up to $3,000 through your tax return ($540 tax offset).
Please note the spouse contribution cannot be claimed if;
- The spouse has exceeded their non-concessional contribution cap of ($100,000 per annum).
- or, if your spouse is under age 65 and have not exceeded the contribution cap under the bring-forward rule, which would allow a maximum non-concessional contribution up to $300,000.
This strategy is not for everyone and has been provided as general information only and prepared without taking into account your financial position, objectives, and needs. You should consider its appropriateness and seek financial advice before making any financial decisions.